Lots of China News

We were presented with an interesting spate of reports from China overnight as we await the USDA figures this morning. First of all, after supposedly overhauling years of data, they have determined that the corn crop last year in that country is 20% larger than previously thought. 259 MMT in 2017 versus the previous estimate of 215.9. There was no “official” reason provided for the change, but an analyst who wished to remain anonymous suggested that farms in the northeastern reaches of the country have previously been excluded from the estimates. So much for efficient central planning. Regardless, in a separate report it was estimated that with the growing domestic demand, the actual deficit in 2018/19 will be larger than previously forecast. They now expect total consumption to reach 245.8 MMT, which is up 9 MMT from previous estimates, which means overall corn deficit increases by 7 MMT to 29.3 MMT. Recognize that this figure could be ratcheted lower due to the ongoing problems with African Swine Flu, but should at least be partial if not fully compensated by the push to increase ethanol production. They also released October import data, and for the month they brought in 5.85 MMT of soybeans. This was down 27% from September but was still 18% higher than a year ago. It would appear they have done all they can to drain the available supplies in Brazil.

Speaking of which, Conab released official updates for the Brazilian crops this morning and projected a soybean crop between 116.8 and 119.3 MMT and corn between 90 and 91 MMT. Last year they produced a 119.3 MMT bean crop and 80.8 MMT corn crop.

This is Thursday morning which means weekly export sales, and we did witness a nice boost in wheat and corn. For the week ending November 1st, we sold 661,200 MT or 24.3 million bushels of wheat. This was 14% higher than the previous week and 47% above the 4-week average. Top numbers went to the Philippines with 306.1k MT, followed by Indonesia with 130k, and then Japan taking 99.6k. Corn sales jumped 78% over the prior week with a figure of 701,500 MT or 27.62 million bushels. This was also 32% above the 4-week average. At the top of the list, we find Japan purchasing 371.5k MT, followed by Mexico with 267.6k and then South Korea at 127.1. Beans were the laggards though with sales of 388,400 MT or 14.27 million bushels. This was 2% below last week but still 16% above the 4-week average. The Netherlands were the top purchasers with 140.4k MT, followed by Thailand with 80.8k and then Spain taking 70.6k.

We are just a few hours away from the November word of gov., so one last time here are the estimates; Total US corn production is estimated arrive at 14.725 billion bushels derived from a yield of 180.05 bpa. It is expected this will result in an ending stocks figure of 1.774 billion bushels. For comparison, in October the figures were 14.778, 180.7 and 1.813. For beans, we find a production estimate of 4.676 billion bushels from an average yield of 52.95 bpa. Ending stocks are expected to total 902 million. Wheat ending stocks are projected to come in at 963.5 million. In October the figures were 4.690, 53.1 and 956. Globally the trade expects corn ending stocks to total 159 MMT, beans at 110.95 MMT and wheat at 259.5 MMT. Last month these came through at 159.4, 110 and 260.2.